Title: Treasury Management: Convert Aavegotchi Treasury’s DAI and sDAI
Author(ID): 0xlide(#9345) Kingo Iwamoto(#5758)
Quorum requirement: 20% (9M)
Vote duration: 7 days
XP Reward: 20 XP for each Aavegotchi in the voter’s wallet
This proposal suggests converting the held DAI into sDAI and sFRAX to increase the income of the Aavegotchi DAO.
AavegotchiDAO holds 6.5 million DAI in its treasury, and by converting this into 3.0 million sDAI and 3.5 million sFRAX, the treasury can generate an annual yield of over $315,000. Furthermore, splitting it into sDAI and sFRAX will help diversify the treasury’s portfolio more than before and reduce its reliance on Maker DAO.
Contract Adress: 0x83F20F44975D03b1b09e64809B757c47f942BEeA
Acquisition Amount: 3,000,000 sDAI
APY: 4.20 ~ 5.00%(*DSR ~ EDSR 2023-10-23)
About: Savings Dai (sDAI) is an ERC-4626 representation/wrapper of DAI in the Dai Savings Rate (DSR) module.The sDAI vault APY is calculated based on the DSR set by Maker DAO and the EDSR, which is determined by the utilization of the DSR. The EDSR has a maximum limit of 5% and decreases as more DAI is staked in the vault. Additionally, the EDSR is a one-time, one-way temporary mechanism, which means that the EDSR can only decrease over time, it cannot increase again even if DSR utilization goes down.
Contract Adress: 0xA663B02CF0a4b149d2aD41910CB81e23e1c41c32
Acquisition Amount: 3,500,000 sFRAX
APY: 5.40%(*IORB Rate 2023-10-20)
About: Staked FRAX (sFRAX) is an ERC4626 staking vault that distributes part of the Frax Protocol yield weekly to stakers denominated in FRAX stablecoins. The sFRAX vault APY is based on a utilization function that can be set by the frxGov governance module. The utilization curve starts at a top end of 10% APY and theoretically has no bottom; however, as more FRAX is staked in the vault, the protocol will attempt to deploy the staked FRAX to sources that yield as close to the IORB rate as possible to keep the bottom APY close to the IORB oracle.
The recommended procedures for acquiring sDAI and sFRAX are as follows:
Deposit the acquired $3 million DAI into DSR to obtain sDAI.
1.To prevent MEV attacks, use CoWswap’s TWAP Order to convert $3.5 million DAI to FRAX.
2.Deposit the acquired $3.5 million FRAX into Frax V3 to obtain sFRAX.
- Gather community feedback and reach a consensus.
- Publish snapshot vote.
0xlide & Kingo Iwamoto are not affiliated with or paid by Maker DAO or Frax Finance to publish this Proposal.
Copyright and related rights waived via CC0.